Schwab sues banks over $1.38 billion in RMBS issuance

Charles Schwab Corp. is suing units of 11 big banks that sold or issued certificates in securitization trusts backed by residential mortgage loans to its bank.The banks named in the complaint filed on July 15 include BNP Paribas, Bank of America, Citigroup, Credit Suisse, Deutsche Bank, Goldman Sachs, HSBC, Royal Bank of Scotland and Morgan Stanley.In a complaint filed with the Superior Court of California, County of San Francisco, Schwab said it paid the defendants $1.38 billion for 37 certificates in 36 securitization trusts backed by residential mortgage loans.Schwab alleges the defendants made “numerous statements to Schwab about the certificates and the credit quality of the mortgage loans that backed them” and “many of those statements were untrue as to material facts.”

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Jacob Gaffney is the Editor-in-Chief of HousingWire and HousingWire.com. He previously covered securitization for Reuters and Source Media in London before returning to the United States in 2009. While in Europe for nearly a decade, he covered bank loans and the high yield market, in addition to commercial paper, student loan, auto and credit card space(s). At HousingWire, he began focusing his journalism on all aspects of the housing and mortgage markets.